As Yogi Berra would say, it’s deja vu all over again.

Back in 2005, the City of Peoria got Pioneer Industrial Railway removed from the Kellar Branch and replaced with Central Illinois Railroad Company (CIRY) through a legal process known as an “adverse discontinuance request” they filed with the Surface Transportation Board (STB). But since that time, the City and CIRY have never fulfilled their promises to provide comparable service (or any service for a six-month period) via the Kellar Branch or the Western Connection. Carver Lumber, which initially did not object to the replacement carrier, has petitioned the STB to have Pioneer restored as the carrier. Thus, the proceeding has been reopened, taking us all back to where we were in 2005. That means the STB’s decision could be reversed and Pioneer could be restored as the carrier on the line.

The reason the city wants CIRY is because they want a carrier that will cooperate with their plans to turn the Kellar Branch into a recreational trail. While Pioneer is willing to cooperate with the building of a trail, they wouldn’t agree to removing the rail line because it would cheat Carver Lumber out of competitive rail service. Neither CIRY nor the city have any reservations about screwing Carver Lumber, despite Carver’s 60-year history of local ownership in Peoria.

The STB ordered all parties “to supplement the existing record by submitting additional evidence to the Board regarding the relative benefits and burdens that continuation of [Pioneer’s] service on the Kellar Branch, on the one hand, and the cessation of [Pioneer’s] service on the other, would have on the involved carrier [Pioneer], on the owner-lessor of the line [Peoria and Peoria Heights], and on the public [Carver Lumber, interstate commerce, local residents, etc.].”

The City of Peoria, the Village of Peoria Heights, and CIRY all filed their comments on February 22 and 23. Carver Lumber and Pioneer filed their comments on March 15. Here’s a quick summary of what they had to say:

Central Illinois Railroad Company

CIRY was originally owned DOT Services, but in August 2006 was acquired by a newly-formed company, Central Illinois Railroad Holdings, LLC, through a stock purchase. The new president of the company, John Darling, wants to distance himself from any and all negative actions taken by the previous owners, such as the runaway train incident in August 2005 and the subsequent six-month lapse in service. Hence, the filing states, “CIRY will limit its comments to the service it has provided under current management. It has no contact with the former managers and owners of the railroad.”

The current president lists all of Carver’s grievances and then proceeds to say he can’t respond to them because they all happened under previous management. He does, however, state that CIRY will not restore rail service over the Kellar Branch unless the City of Peoria puts up the money to upgrade the tracks. He also claimed to be working with Union Pacific (UP) to come up with better rail rates and timely service for Carver via the western connection, but concluded with the less-than-hopeful statement, “If we can solve the economic problems, we will then work with UP to arrange a service schedule and frequency that is operationally feasible and acceptable to the customer.” That’s a mighty big “if.”

The City of Peoria

Peoria offered a terse reply, basically forwarding the minutes of the February 13 City Council meeting (but strangely, not the February 20 meeting when the decision was actually made) and stating:

The Cities saved the Branch from dismantling more than 20 years ago by acquiring and rehabilitating it when no rail carrier or shipper was willing to do so. Having done so, the Cities should have the right to select the operator of the Branch.

Indeed, this is the whole of their argument before the STB. They own the Kellar Branch and thus, they should get to decide who the carrier is. The STB should butt out, they basically said.

That’s not particularly persuasive, since there is no question that the STB has the regulatory authority to make the decision, the city’s emotional protestations of inequity notwithstanding. I wonder how the city would respond if one of their residents tried a similar tack regarding the city’s zoning laws; viz., “I own the land and should be allowed to do whatever I want without a governmental body interfering. The city should just butt out.” My guess is that resident wouldn’t get very far.

They also include copies of petitions with the signatures of a couple hundred trail supporters as evidence of “substantial public support” for a trail over a rail line.

The Village of Peoria Heights

Peoria Heights, originally a party to the adverse discontinuance proceeding, has now formally declared their neutrality on the issue, and in fact is exploring alternatives that would require keeping the tracks in place, such as a proposed trolley line. This is significant since the bulk of the Kellar Branch slated for conversion to a recreational trail lies within the Heights’ village boundaries.

Carver Lumber

Carver Lumber’s letter to the STB is mostly a rehashing of their position as stated in their July 2006 letter to the board in which they asked for the proceeding to be reopened. However, in direct rebuttal of CIRY’s statement that they would “work with UP to arrange a service schedule and frequency that is operationally feasible,” Carver did reveal this interesting tidbit:

At a meeting held on November 9, 2006 in the Peoria City Hall with Mayor Ardis, Congressman Ray LaHood, Wayne Borg and Kim Deyo of the Union Pacific, Dick Carver and various other city staffers, Congressman LaHood specifically asked the UP representatives if anything could be done to improve the delivery time to Carver Lumber and was told emphatically by the UP that nothing could or would be done by the UP to change the current delivery schedule to Carver via the Western Connection, The matter seems quite closed and has been exhaustively debated with the same consistent answer.

Further, they stated that the rates are so high and service so slow via the western connection, it’s actually cheaper for them to transload their materials and have them trucked up to their business. They’re quick to add, however, that “[t]he current transloading operation is not a solution. It is expensive, disrupts our scheduling, and negatively affects our ability to compete. Carver must compete with larger chain dealers that have more buying power than we do. The long-term viability of our business is at risk if we are not able to resume rail shipments.”

They conclude by saying Pioneer is the only carrier that is willing, ready, and able to provide the service they need over the Kellar Branch, and asks the STB to restore them to the line.

Pioneer Industrial Railway

Pioneer’s 80-page filing begins by displaying a good grasp of what the STB is asking. The STB wants evidence to show what the effect of switching carriers would be on the City, the Village, Pioneer, Carver, and the general public. Pioneer then claims that “Peoria has failed to make its case for the adverse discontinuance of [Pioneer’s] rail service over the so-called Kellar Branch because Peoria has ignored all but its own interests” (emphasis mine).

They then go on to heavily document how switching carriers would lead to undue hardship on Carver Lumber (extremely higher prices, slower service) since CIRY has proven they cannot offer competitive rail service over the western connection and have stated emphatically they will not provide service to Carver over the Kellar Branch unless the city upgrades the tracks, which the city has said it will not do because they want to make it a recreational trail.

On that last point, Pioneer for the first time deals head-on with the City’s contention that a linear park is more important than competitive rail service for Carver Lumber. They point out, first of all, that Peoria Heights has not taken a position, indicating that public support is not as strong as the City would like the STB to believe. Then they use the Park District’s own website to prove that Peoria is not underserved for parks and trails (emphasis mine):

It is worth noting that Peoria, having articulated a desire to convert the Middle Segment to a linear park, nowhere substantiates a need for such a park that is even remotely commensurate with Carver’s need for direct and economical rail service. Online research (the results of which are attached as Exhibit C) reveals that the Cities enjoy considerable park facilities, including five existing linear parks or trails[….] In all, the Peoria Park District’s website reveals that the District already has 29 miles “and counting” of trails and urges readers to “enjoy the many miles of bicycle, walking, or hiking trails Peoria has to offer,” calling it “a unique system of regional trails.. ..linking schools, recreation facilities and scenic natural areas throughout the area.” The Peoria Park District’s website also boasts that the District’s “open space holdings in the City of Peoria, Peoria Heights and outlying townships approach[es] 9,000 acres,” and that the District “ranks first in the state and is one of the top public park systems in the nation based on its ratio of open-space holdings to population.” Consequently, a decision denying the Cities’ application on reopening would not serve to deprive the communities of critical park space, but it would prevent Carver from having direct rail service. Moreover, PIRY stresses again its willingness to work with the communities to allow a linear park to be located alongside the Kellar Branch tracks.

It’s important to note that last line because no one is trying to deny the Park District its linear trail; other options are available to route the trail without removing the rail line. It has been proven, however, that there is no feasible alternative to the service Carver and potential shippers would receive from the Kellar Branch rail line

Conclusion

Of course, this is a necessarily cursory look at the filings. The ball is now in the Surface Transportation Board’s court. They have committed to a speedy resolution to this issue, but they’re a slow-moving body. If I were a betting man, I would bet a decision will be handed down no sooner than April, and possibly as late as June.

If the STB rules in favor of Pioneer, then the Park District’s hopes of a dedicated trail are over. They will have to come up with Plan B to connect the Rock Island Trail with the Pimiteoui Trail. If the STB rules in favor of the City and allows CIRY to be the carrier, then you can expect Carver Lumber to either go out of business or move to one of the surrounding communities. You can also expect that the western connection, for which the city paid a large sum of money to extend so it would connect with the Kellar Branch, will sit fallow, just like it did for years before it was connected, because it has been and will remain uncompetitive.

Stay tuned for the exciting conclusion to the Kellar Branch Saga.